Iceland: Democracy in action, arrest the bankers, throw out the politicians and tell the IMF to piss off

The citizens of Iceland voted in a referendum, on Saturday (20th), with about 70% of the voters. The basic text of its new constitution, drafted by 25 delegates, almost all ordinary men, chosen by direct vote of the people, included the nationalization of its natural resources. Iceland is one of those enigmas of history. Situated in an area warmed by the Gulf Stream, which winds in the North Atlantic, the island of 103,000 km2, is inhabited only along its coast.

The interior of high hills, with 200 active volcanoes, is entirely hostile - but this is one of the oldest democracies in the world, with its parliament (Althingi) running for over a thousand years. Even under the sovereignty of Norway and Denmark, until the late 19th century, Icelanders have always kept comfortable autonomy in their internal affairs.

In 2003, under pressure from neoliberals, Iceland privatized its banking system, up to that time state-owned. As they pleased major U.S. and British banks, already operating in the derivative market, in the spiral of subprimes, Reykjavik turned into a great international financial center and one of the biggest victims of neoliberalism. With only 320.000 inhabitants, the island became a comfortable fiscal paradise for the great banks.

Institutions like Lehman Brothers used the country's international credit in order to attract European investments, particularly British. That money was applied to the financial casino, commanded by U.S. banks. The bankruptcy of Lehman Brothers exposed that Iceland therefore has taken debt exceeding ten times its gross domestic product. The government was forced to re-nationalize its three banks, whose executives were prosecuted and sentenced to prison.

In order to tackle the huge debt, the government decided that each of the Icelanders - of all ages - would pay 130 euros monthly for 15 years. The people demanded a referendum and, with 93% of the vote, decided not to pay that debt as it was the responsibility of the international financial system from Wall Street and the City of London.

The country's external debt, built by the irresponsibility of banks associated with the largest global financial institutions, led the nation to insolvency and Icelanders to despair. The crisis has become political, with the decision of its people to change everything. A popular assembly spontaneously gathered and decided to elect a constituent body of 25 citizens, who didn't have any partisan activity in order to draft the Constitutional Charter of the country.

To apply to the legislative body, the selecttion of 30 people was enough. There were 500 applicants. The chosen heard the adult population, who spoke via internet, with suggestions for the text. The government took over the initiative and formalized the committee to submit the document to the referendum held yesterday.

Upon being approved yesterday by more than two-thirds of the population, the constitution must be ratified by Parliament.

While Iceland is a small nation, away from Europe and America, and with an economy reliant on foreign markets (exports of fish, mainly cod), their example may serve other people, overwhelmed by the irrationality of the financial dictatorship.

During these few years, in which the Icelanders resisted against the harassment of large international banks, the international media have been conveniently silent about what is happening in Reykjavik. It is an eloquent sign that Icelanders may be paving the way to a peaceful world revolution of the people.

Obama didn’t have the balls to step up and take the financial thugs on. He folded without looking at his cards. He deferred to the gangs of Potomacdor and focused on maintaining his cool. Looking good. High styling dude that he is.

Someone, in a previous thread claimed the average ACTIVE-DUTY military are backing Romney, just take a look at the political contributions figures. From the top brass to the boots, contributions are running almost 2-to-1 for President Obama. And as the uncle of a Marine who in the past 10 years already has done three combat tours, it isn't hard to figure out why. We've already tried eight years of a tough-talking swaggering fool and we see how well that worked out. We sure don't need somebody who changes his mind about Syria every other day.

Here is another way to 'get the banks'. Bank of America/Credit Suisse Group is after Mr. Buttplug for $300 million, additionally he scored on many of an ordinary rich folk who put money down on lots.

I know of the guy's son, but don't want to say how.

I was on the lookout for the old man for awhile. Thought maybe there might be something in it for me. :) Before the judge issued the bench warrant, which he knew was coming down, Buttplug skipped. If you know of his whereabouts, post above. Or not, if you find yourself admiring the man.

My wife and I have gotten much merryment out of this whole situation. B of A/Credit Suisse Group got stiffed, Valley County got stiffed, as they should, since they should not have approved the deal in the first place, the out of state rich got stiffed, and the Idaho Court got stiffed. This last angers me a little, but the arm of the law is long, and patient.

I am happy as hell. Everything worked out just fine. Back in the day, up in that area, the chief of police went nuts, drove around town shooting people, saying, the flatlanders are coming, the flatlanders are coming. Gunned down by his own deputies, he could not take the invasion from Boise any longer. I am in sympathy.

There are many ways 'to get the banks.'

By the way, what actual legal charge was leveled against the Icelandic banks?

In sympathy, not with the Chief going shooting, of course, but with his despair at seeing a small part of paradise overrun.

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The Obama administration funded a study redefining domestic terror threats to exclude radical Islamists, while including people who are "reverent of individual liberty" and "suspicious of centralized federal authority."

Iceland is a parliamentary democracy of 300,000 people with the eligible voter population being on the order of 100,000 to 150,000 (??), or well under a tenth USA population, and consisting of ethnic Europeans with no Asians, blacks or Hispanics, and my guess is less income disparity. The point of line of commonality is the well-defined division between the bankers and the homeowners.

However from what I have read, the surprising depth of the Icelandic problem was due, only in part to bad home mortgage paper, but, in larger part to foreign money laundering, primarily by the Russian mafia.

The columnist George F. Will recently shocked his fellow conservatives by endorsing Richard Fisher, president of the Federal Reserve Bank of Dallas, to be Treasury secretary in a Mitt Romney administration.

Fisher’s appeal, in Will’s eyes, is that he wants to break up the largest U.S. banks, arguing that this is essential to re- establish a free market for financial services. Big banks get big implicit government subsidies and this should stop.

He added that the evidence pointed to the optimal size for a bank is under $100bn (£62bn). However, the “big banks are even bigger” than before the crisis, he noted. Barclays PLC (NYSE:BCS) (LON:BCS)’ balance sheet is £1.5 trillion, Royal Bank of Scotland Group plc (LON:RBS) (NYSE:RBS)’s £1.37 trillion, and Lloyds Banking Group PLC (ADR) (NYSE:LYG)’s £930bn.

The argument is simple and sound-bite ready: In the years before the crisis, greedy bankers used their political muscle to grow from small, specialized banks into giant, all-purpose financial institutions. This transformation led to the financial crisis because banks became too big to manage and too big to fail. If we break them back up, we will eliminate the risk of future crises.

The problem is that every part of this argument is based on a fallacy.

The first fallacy is that the emergence of large, universal banks — combining commercial banking with investment banking — was an artificial or unnatural development. In 1990, there were 15,000 banks in the United States; this fragmented market meant that banks could not achieve economies of scale or easily serve clients on a national or global level.

The consolidation that took place was driven by the market’s needs and represented an evolution toward greater efficiency in banking, just as companies like Amazon, Starbucks and Home Depot brought efficiency to retail. Even now, the American financial services industry is far less consolidated than its peers across most of the developed world.

A second fallacy is...

The NYT piece is thoughtfully included as a calibration for the reader's BS meter, as required.

Magnificent Ronald and the Founding Fathers of al Qaeda

“These gentlemen are the moral equivalents of America’s founding fathers.” — Ronald Reagan while introducing the Mujahideen leaders to media on the White house lawns (1985). During Reagan’s 8 years in power, the CIA secretly sent billions of dollars of military aid to the mujahedeen in Afghanistan in a US-supported jihad against the Soviet Union. We repeated the insanity with ISIS against Syria.